You may think that as you are on the verge of defaulting on your mortgage payments, you may have to lose your dream home. But rather than losing all hope and despairing on the situation, it is better for you to think of the ways in which you can save your home. There are mainly two options through which you may be able to save your home and these are the loan modification and mortgage refinancing. The process involved in loan modification and refinance helps in changing the terms and conditions of the home loan, thereby helping you save your home.
Save your home through refinancing
Refinancing is the process where you are required to take out a home loan in order to replace the previous one. Now, the interest rate of the new home loan; more like a second mortgage; will have to lower than the previous one and the loan term too should be longer than the first one. This helps in reducing the payment amount that you are required to make in installments.
So, you can try to refinance your home loan in order to save your home. But to get the right type of second home loan so as to refinance the previous one, you will be required to do some serious research and shop for the right kind of refinance loan. You can however, try to get the refinance loan with your previous lender too.
Before taking out the refinance loan, you will have to check with the interest rate ruling the mortgage market. Only if the interest rate is low in comparison to the previous mortgage that you already have, you can opt to refinance your home loan. Other than that, talk with different lenders so as to find out the details of their terms and conditions and so on. You will not only be able to save your home through refinancing but you may also be able to save money on the mortgage payments if you use the refinance loan.
Refinancing is more or less similar to home loan modification. The only difference is that in case of refinance, you are required to take out a new loan but in case of the mortgage modification, you are not required to take out new loan. You are simply required to talk to the lender with whom you had taken out the first loan and discuss with him about the problems you are having in making the payments. The lender as a result may agree to change the terms and conditions of the loan and that to as per your affordability.